As a music industry pro - whether you be an A&R rep, you own a publishing company or are an indie musician looking to maximize your marketing budget, you know market research is crucial.
You also know that sifting through reports and analyses can be well, somewhat tedious - but we’ve got your back on that one:
In this edition of the music markets, we look at some of the major trends and projects for a major global segment in the industry: Europe. Before we run the numbers, let’s set the stage: the global music market saw growth for the seventh consecutive year in 2021, at 26 billion dollars, according to the International Federation of the Phonographic Industry (IFPI).
Largely driven by streaming, this is still good news for musicians and their teams worldwide. So, how big of a slice of that $26 billion pizza pie belongs to Europe (including the UK)?
About $7.8 billion, or according to IMPALA; approximately 30%.
That’s a big slice of pizza! Ok, so we’ve determined that we definitely want to be operating in Europe. So how and where, specifically, do we approach? Let’s start with live shows.
Live Music - Europe a Sensible Place to Focus
When planning your next tour, you might consider Europe for a number of reasons. Having so many different countries packed together so tightly makes it an excellent place to tour.
This is because travel time between stops tends to be limited, and the vast majority of travel between countries in the EU is free- not financially; Most borders in the EU are open.
Seasoned veterans already know this means less time is spent at customs per stop than any other international tour circuit in the world - customs also have a bad habit of denying artists entry for various reasons. Of course, you should always obtain the correct visas and permits and follow all of the laws of any country you're touring in. However, in a practical sense - the less you have to deal with customs; the better.
Two countries stand out in the market as the leaders by a large margin. The first of these is Germany, followed neither surprisingly, nor far behind, by the UK. Not too far behind the UK is France and then Italy.
These countries all share borders, so planning a tour from London to Berlin, then to Paris, and on to Milan makes sense from both a logistical and a marketing standpoint. It sounds like a great trip too!
Here is a complete ranking for more ideas about where to seek live performance gigs in Europe.
Good Old Fashioned Streaming
Streaming has been the backbone of the industry's growth, and while the global nature of this service can make it slightly different to tap into the data. Unfortunately, that information is usually privy to artists and their teams, but there is still much to be gained from high-level data.
For example - it’s being reported that in the same way physical record sales were diverted to digital downloads to the point of irrelevance; now streaming threatens to do the same to digital sales. This is reflected quite distinctly in the European music markets, with 65% of the industry share going to streaming, versus a meager 4% to digital downloads. That’s a wide gap, but it’s the tale of what formats are filling that chasm that really steals the story. CD, vinyl, and cassettes made up nearly a fifth of the market.
Record Sales - the Revival of Physical & Digital?
Streaming, without a doubt, retains its title as the big dog in the market, but as it swallows up digital sales, physical sales are making a strident comeback.
Interestingly, things seem to have gone full circle, as with the decline of digital through streaming, now physical sales have seen growth not experienced in decades.
In the UK, vinyl records sold more copies this year than PlayStation games. While this is likely equally due to the fact Playstation has invested in its subscription formats, it’s still a milestone for an industry that has been seeing slow but steady growth over the past few years.
Hopefully, this trend continues, as physical sales and merchandise are some of the best sources of revenue alongside performance, for many artists and their teams.
What Types of Businesses are Successfully Operating in the European Music Market?
Music businesses that are considering entering the market should be equally prepared to compete with American content and European content. It has been found that 50% of the top tracks both listened to on the radio and downloaded in Europe come from the United States. This makes a good place to start in terms of brand and content positioning for artists and their teams. Study who is successful in your genre, what kind of content they are putting out, and why it is popular, and teams are likely to gain a clearer understanding of what their audience wants and responds to.
The same study that found half of the top music on the radio is American, also found that 99% of music businesses in Europe are micro, small, or medium. This is a stark contrast to the days of old when a few corporations decided who got the spotlight and who got left on the street.
The benefits of the more independently-dominant market are that artists and teams are largely empowered to be responsible for their own success if it is a little more humble. Digital may have killed the megastar, but in the ashes of glamour a blue-collar music trade has emerged and that is objectively a good thing.
The streaming royalties will get sorted out eventually, but it can help to look at where the market has come from, to see past the problems that are on our faces at the moment. For now, the European markets are moving in the right direction, and it is a good time for organizations to consider entering it.
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